Before the Downtown El Paso arena ever comes to fruition, there are several steps the city needs to take, including resolving pending litigation, completing an archeological study and evaluating how much more funding is needed.
And El Paso isn’t the only community exploring or building an arena. Across the country, arenas are big business.
Peter Luukko, chairman of global venue management company Oak View Group Facilities, said the industry surrounding arenas is strong but looks different in different communities.
Some projects are publicly financed, some are private and some are public-private partnerships. For example, Oak View Group is currently working with the city of Savannah, Georgia, on its new $165 million multipurpose arena.
“I think we’re seeing a combination of new facilities and facilities being replaced because they’re outdated,” Luukko said. “We’re seeing places like El Paso where there isn’t really a true venue, and markets that have grown in population from 300,000 to a million and can be served by an arena.”
The Wall Street Journal reported in November that Oak View Group, which is based in Los Angeles, is slated to develop eight new arenas with 10,000 to 18,000 seats over the next three years – a $3.9 billion investment. Six of the arenas will not have professional sports teams as anchors but will focus on concerts, tapping into the live-music boom.
Luukko told El Paso Inc. that there’s been a trend of more live music at multipurpose centers. Oak View Group also works with arenas to book concerts and other events.
“When you’re booking a show and you see there’s a new facility in the market that hasn’t had entertainment and is starving for it, it becomes very attractive,” Luukko said.
Sam Rodriguez, city engineer, said the city of El Paso has not explored different types of financing models but will consider funding sources like partnerships and tax increment reinvestment zones, as well as things like venue and seat naming rights.
The city is still in litigation over a lawsuit filed in relation to the long-delayed Multipurpose Performing Arts and Entertainment Center, commonly referred to as the arena. There are still injunctions in place that prevent city officials from moving onto design, financing and construction aspects of the project.
On Jan. 17, the Texas Supreme Court declined to take up an appeal by historian and UTEP professor Max Grossman, who alleges voters never approved the arena for sports use and that the facility shouldn’t be built in the designated footprint because of the area’s historical significance.
Since the Supreme Court declined to hear the case, the ruling of the 3rd Court of Appeals becomes the law that binds the city, said City Attorney Karla Nieman.
That ruling found sports is allowed at the multipurpose center, and the city can tap into other sources of funding to supplement the project. El Paso Mayor Dee Margo has said that the multipurpose center, originally budgeted at $180 million, could cost as much as $250 million today – or more.
The opponents in the case have until Monday to ask for a rehearing, a city spokeswoman said.
The city is also working with Moore Archeological Consulting to conduct a study of the arena footprint. Rodriguez said any artifacts found at the site would eventually reside at the UTEP Centennial Museum.
The city is still in litigation in the 8th Court of Appeals over a lawsuit filed by Grossman and two remaining residents of the Duranguito area. Nieman said she expects litigation to finish by the end of 2020.
“The total amount of money we’ve paid for lawyers is closer to $3 million,” Nieman said. “Maybe roughly half was related to litigation and the other half to acquisition.”
The multipurpose center was part of the 2012 quality of life bond election, and Rodriguez said the longer the project is delayed the more it will cost.
“With the delays from the lawsuits, we have lost value of money on that $180 million,” Rodriguez said. “It’s going to put us into a very challenging position moving forward on being able to secure additional funds for the facility.”
Luukko said an arena’s success depends in part on the support of a community.
“The community has to believe in it as an asset, and it has to feel welcomed,” Luukko said. “I think a lot is how you kick the project off, the support you have behind it, community events.”
Proponents of the arena say it’s a necessary part of the plan to continue revitalizing and strengthening Downtown.
There has been significant investment in the Downtown area over the last 10 years, including multimillion-dollar hotel renovations, new office towers and changing ownership of some of the city’s landmark buildings.
“The (multipurpose center) is a piece of the puzzle and we have to take into account what else is happening Downtown,” Rodriguez said. “The (multipurpose center) is just going to add to Downtown, and it’s the results of the policies City Council has put in place.”
Email El Paso Inc. reporter Sara Sanchez at email@example.com or call (915) 534-4422, ext. 105.